The Smithfield Packing Company, Inc., a subsidiary of The Smithfield Foods, Inc. (SFD), plans to expand and thus include a new packaged meats product line in Kinston, NC and shift its hot dogs and lunch meat plant to Kinston from Portsmouth, VA.
Currently, the existing Kinston facility is operated by Smithfield Packing. The facility primarily includes production of fresh pork, smoked meats, bacon, cooked hams and hot dogs for retail, food-service and deli channels.
With the addition of a new product line of packaged meats in Kinston, Smithfield will be able to increase its packaged meats production in accordance with the demand. Accordingly, the expansion will involve an investment of $85.5 million over the next three years. Further, it will provide jobs to 330 people, with annual salaries averaging $27,644 plus benefits.
On the other hand, Smithfield stated that it will close its hot dogs and lunch meat plant in Portsmouth in 2013 and shift to Kinston, as the plant was not able to support the changes in manufacturing technology and new product development requirements.
The closure will impact the lives of approximately 425 employees, though transfers to North Carolina and Virginia will be offered to some of the employees.
Accordingly, the company will provide employees with a 90-day prior notification before the plant closes, under the federal Worker Adjustment and Retraining Notification Act (WARN). Besides, Smithfield hinted that it will inform state dislocated worker units to immediately provide assistance to the dislocated employees.
The shift to Kinston facility will enable the plant to improve the overall efficiency of the company and to continue to provide customers with the highest quality products.
Smithfield posted improved earnings of 69 cents per share in the first quarter 2012, surpassing the Zacks Consensus Estimate by a penny, which was driven by strong packaged meats earnings in spite of higher raw material costs.
Further, Smithfield uses advanced management techniques like economies of scale and production methods, together with the use of advanced SPG genetics, to produce premium quality hogs on a large scale at low cost.
Smithfield, together with its subsidiaries, engages in the production of hog, and processing of pork and beef worldwide. The company offers fresh pork products, packaged meat products, dry meat products and ready-to-eat foods. Smithfield Foods is also involved in turkey production and hatchery operations. The main competitors are Hormel Foods Corp (HRL) and Tyson Foods Inc (TSN).
